COMPANY PRESS RELEASE: The Group made an adjusted profit before tax of £178 million, a fall of 7% compared with the equivalent figure for last year of £192 million, on turnover up 6% to £1.96 billion.
Associated Newspapers, the Group’s national newspaper division, had another successful year. Its operating profit rose 13%, despite a difficult advertising market in the second half of the year. Circulations continued to increase, outperforming the market despite cover price increases during the year. The Daily Mail’s average circulation rose 2.1% to 2,431,000 and that of The Mail on Sunday by 2.7% to 2,359,000. The Evening Standard’s average circulation fell 2.5% to 430,000 due to falls earlier in the year, but its September sale reached a 10 year record high.
Advertising revenues have suffered from difficult market conditions in the second half of the financial year. As described in the Group’s trading statement in September, display advertising was recovering in July and August, but fell sharply after 11th September. Classified advertising had a strong first half year, but the recruitment category in the Evening Standard weakened appreciably in the second half. In total, advertising revenues for the year were up 1.6% with the Daily Mail showing a 2.8% increase, The Mail on Sunday a 2.5% decrease led by financial advertising, the Evening Standard down less than 1% due to the continuing strength of property advertising, and Metro up an excellent 26%.
Newsprint costs rose due to higher circulations and to an average 12% increase in price from 1st January, 2001. Employment and other costs have been kept under tight control.
Northcliffe Newspapers, the Group’s regional newspaper division, increased its operating profit by 5% to £97 million. The average circulation of Northcliffe’s daily titles slipped by 4%, although its weekly titles continued to show overall growth.
Recruitment advertising revenues showed strong, albeit slowing, growth throughout the year and, for the year as a whole, were up by an underlying 18% on last year. Even in September 2001, year on year growth was 11%. Among other categories, property was up 5% for the year but motors down 3%. In total, advertising revenue was up 5%.
Profits from contract printing fell as other publishers acquired new printing capacity and brought the printing of their own titles in-house. Losses from internet activities increased due to expenditure on the introduction of a new software platform. The new This is. sites are now being rolled out and will lead to reduced costs both in the internet and traditional publishing areas.
Euromoney Institutional Investor has already announced its results, which showed a decrease in operating profit from £32.5 million to £28.1 million. The financial advertising markets were already weak before 11th September, but Euromoney’s results were immediately affected by the impact of the terrorist attacks.
Within DMG Broadcasting, Teletext had another good year, although its operating profit was lower than the previous year due to higher marketing and new project costs. Its advertising revenue grew by 6% with strong growth from the overseas holiday market partly offset by lower UK holiday advertising, depressed by the effects of the foot and mouth outbreak. Teletext’s new services are making good progress, with satellite television and SMS messaging services being launched during the year.
DMG Radio Australia’s regional stations have suffered difficult trading conditions, being affected by the introduction last year of a new sales tax. Nova 969, our new Sydney FM station, was successfully launched in April 2001 and has to date performed well beyond expectations. A new station in Brisbane, in which DMG Radio has a 50% interest, launched in October and our new Melbourne station, Nova 100, launched last week.
dmg world media, the Group’s exhibition division, has had a very busy year. It has established itself as the world leader in its three chosen sectors: art and antiques, home interest and the gift trade. In each sector, significant acquisitions were made and the focus is now on their integration and on organic growth. In terms of trading, art and antiques had a difficult year, but the other two sectors performed largely as expected. Our businesses in the Middle East and Australasia have thrived, although the Latin American market has been tough. We were unsuccessful in selling the business media division amid deteriorating trading conditions and this business has now been substantially restructured.
DMG Information again grew strongly. Hobsons continued to expand in Europe with the acquisition of a business in France to add to its growing international network. However, the economic decline has resulted in challenging market conditions for its graduate recruitment business in recent months. Study Group International grew its operating profit by 34% with improving margins, and a particularly strong performance in Australia. The property information publishers, EDR in the United States and EDR Landmark in the UK, were the division’s star performers, both increasing operating profits strongly and growing their market shares. Risk Management Solutions grew its revenues by 28%, whilst continuing successfully to develop new business opportunities through internal investment. Sanborn grew rapidly through acquisition and contributed a small operating profit.